People in our region who itemize their deductions are likely to get hit harder than people in low tax, less expensive States. But if you itemize, there are some things you can do in the next two weeks to save yourself a bundle.
Linda de Marlor at Tax-Masters in Rockville says it may be a smart idea to pre-pay your state and local tax now. Send in a check for your estimated 2018 in the next two weeks, and you'll still be able to deduct the full amount from your federal return.
If you add your state and local taxes to your federal taxes now, people in Maryland and DC can end up owing 40% of their income.
"So if I send off a check right now for $1000 to the state of Maryland, then I get to deduct it on this years return, I will save exactly $400 on this years income taxes by sending that check in advance," said de Marlor.
Two wrinkles if you're thinking of pre-paying your state and local tax. One, you need to have the money available to do it. The other thing his, you don't want to pay so much that it pushes you over into the Alternative Minimum Tax.
"I have a client I talked to this morning and he's going to send off a check for $10,000," said de Marlor. That's $4,000 he can save. "He will definitely save that, and he's very happy."
The math can be complicated -- you may want to talk to an expert.
Tax-Masters says your charitable deductions are likely to be worth more this year than next year. So you may want to contribute more before the end of the year.
And it's almost always smart to pay as much as you can afford into a 401K or Roth IRA. That's likely to reduce your tax liability too.